MFH rental with multiple partners

[Bradford Myatt]

Hey all,

Looking for some advice. My brothers in law and I are venturing into the possibility of buying a MFH and becoming landlords. I'm looking for advice on how to possibly design our deal. 

I've been investing in real estate the past year, mostly in SFH and hard money lending. All units are occupied and cash flow positive. I currently have an LLC for my property business and am working toward my license. The property will be deeded into the LLC. I will contribute 25% of the down payment.

Brother in law A is a lawyer who will contribute his legal knowledge and 25% of the DP. 

Brother in law B is handy with maintenance and will also contribute 25% of the DP. 

Partner C is a cash/silent partner who will contribute 25% of the DP. 

Here are some questions: 

1) Considering I will primarily do a majority of the work with this property, how much more, if any, of the profits am I entitled to?

2) Do factor in the same % for vacancy, maintenance, etc. as you would a SFH?

3) If we decide to liquidate the house in 15 years, am I entitled to more of than 1/4 of the profit? 

4) Do I charge a monthly/yearly fee for my work?

Any feedback is appreciated. 

[David Krulac]

@Bradford Myatt

I'd be very cautious about inventing with family and friends.  These things have a tendency to implode and change your family and friend relationships.  Want to lose a friend get in business with them.

If everybody puts in 25%, and I was in that partnership, I'd want 25% share of income and capital gains.

And work on the properties should be hired out not done by a partner like your slef.

Why do you need the partners? 

And you should have an iron clad partnership agreement drafted by an attorney, that details all aspects, like how does a partner get out, what happens if a partner dies, goes bankrupt, goes to jail, gets divorced, etc.  Those BILs could end up out of your family for reasons that have nothing to do with the real estate.